VANCOUVER, British Columbia — On a retail panel at the Canadian Produce Marketing Association’s convention on April 27, Jim Waites joked that he was a little before his time.
The director of produce merchandising started at the Overwaitea Food Group 44 years ago, doing a job many are now becoming familiar with all over again.
“I started when I was 16 years old packing groceries and even doing home delivery, if you can believe it,” he said.
Retailers, especially full-service retailers, are no strangers to home delivery service. But it’s a whole new ballgame now, and we need to be prepared. Chicago-based Brick Meets Click suggests online grocery will grow from less than 5% of total grocery sales in 2017 to more than 8% by 2022.
To pick up — or deliver?
I’ve attended quite a few panel discussions about this topic lately. Is it better to expand “click and collect” or focus on closing the last mile? For Overwaitea, delivery has become so popular that they’re having an issue getting enough vans ordered for their fleet, Waites said.
Support staff for e-commerce has grown from a handful to more than 50 for the 140-store chain.
For Sprouts Farmers Market, which recently paired up San Francisco-based Instacart, delivery’s not achieving the metrics many think are possible, especially when it comes to fresh groceries.
“I think fresh home delivery business is not moving at the speed as what many out there are talking about, and think that the U.S. is moving at,” he said, during the company’s fourth-quarter conference call Feb. 22.
Sprouts is plowing ahead at Instacart expansion, however, because they want to be ready for the inevitable expansion, he said.
Is pick-up the answer?
A recent CoreSight Research study, “U.S. Online Grocery Consumer Survey: Amazon is the Most-Shopped Retailer, but Not Yet a Full-Order Grocery Destination,” suggests more than half of online grocery shoppers prefer pick-up, and online grocery orders for competitor Walmart Inc., Bentonville, Ark., have significantly more fresh and frozen categories versus Amazon.
It could be that Amazon hasn’t had a chance to flesh out its Prime Now plans with Whole Foods. It’s available down in Central Austin, but not up here in the boonies just yet.
Every store in my area — the suburbs north of Austin, Texas — has offered click and collect for a couple of years now, and they have a robust marketing program for it.
I’ve tried it a few times, and I have friends who are ardent supporters, but I still end up shopping in a brick and mortar several times a week.
Expanding pick-up means you’re not leasing a fleet of delivery vans, but physical stores do change quite a bit. Every H-E-B near me has either carved out or added on space to accommodate order pick-up facilities.
What’s your niche going to be?